The Ongoing Chip Shortage—Plan Ahead

If you assumed the chip shortage was going to resolve itself by now, you’re out of luck. Experts estimate it will continue to affect automotive and technology companies well into 2023. That’s why you need to start planning ahead now.

When news first broke of the chip shortage last year, it may not have been a critical issue for you. If your organization’s computers were relatively new and well-maintained, you likely didn’t have to worry about replacing them in the near future.

Unfortunately, the chip shortage not only continues but is getting worse. Manufacturers that rely on these components (Ford, Toyota, Apple, HP, etc.) are anticipating extensive delays in the fulfillment of new hardware and products. They expect the effects of the shortage to last at least into mid 2022.

If you have been delaying orders for your replacement hardware so far, now is the time to get in line. The task will be much more difficult and expensive than ever before, but the sooner you get started, the better.

The Source Of The Shortage…

While chip manufacturers fail to produce a sufficient supply of these key components, prices will inevitably go up. TSMC plans to hike its prices in line with the limited amount of components they are able to produce.

This has resulted in a bidding war among major manufacturers. As globally active brands like Toyota and Apple compete for vital components, they’ll have to pay much higher prices. Add to that increases in shipping costs and higher wages for labor, along with inflations, and you have costs continuing to climb.  Those expenses will be passed along to consumers like you.

While prices may be high now, they’re only bound to increase over the next year. As the shortage continues and demand continues to climb, prices will increase in kind. That’s why you need to start placing orders now for the hardware you’ll need next year and the year after that. The longer you wait, the more it will cost you.

That’s why planning your purchases now is so important.

Do You Have A Hardware Source?

If you’ve placed an order recently with a third party, it’s important to verify what they’re selling you. In a stressed market like this one, the chance of faulty products or fraudulent offers skyrockets.

Make sure to ask these questions before you pay any money:

  • What are the specs?
  • What is the model?
  • Is it business-grade?
  • Is it an old model?
  • Where did they find it?
  • How many did they get?

These questions will help you verify that what you’re paying for is actually what you need. The last thing you want is to pay for a series of consumer-grade laptops or outdated workstations.

Need Expert Assistance?

You need to start strategizing now, and Alliance Technology Partners will help—we can assess and determine the state of your current hardware, and help you plan ahead for when it will be replaced, mitigating as much of the delay as possible.

Get in touch with our team to get started and help ensure your staff members have what they need to do their work now, and in the future.

Thanks to Ashu with Orion Networks in Columbia, MD for his help with this information. Check out his website here.

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